They actually gave Krugman a Nobel Prize; then again, they gave Obama one, too.

The problem with Economists is that they keep confusing what they do with science. It's about as close to a science as Astrology is with Astronomy.

His notion that the commodoity surge is due to demand is without merit and based on false tabulations. In reality, in 2008 when I placed an order for finished copper magnet wire, I had lead times...I am now being begged to place an order. Furthermore, when I order Copper in New York, it is tabulated as US demand even though the company prepares its reels in China and guess what, it is tabulated as China demand, too. Double dipping and fradulent bookeeping.

Supply and Demand has been perverted by the concetration of wealth to a few. Instead of competitve buisness providing the best pricing, all these finanical mini-cartels are fabricating numbers and increasing prices to offset the drop off in demand. It is a controled hyper-inflation and it is about to happen again with the next round of price increases for 2011. The Cable companies will probably raise rates 10-12% to compensate for the drop in revenue from people dropping parts of their services, and the result will be an additional drop in services. The only problem with this spiral is that it is starting to close in on itself quickly. People will soon see that they are now paying the same for close to no service as they paid for full service. The most perverted example of this is McDonalds...they have quietly raised the price of everything a number of times in 2010 and have just now announced that they might need to raise prices; evidently they feel people are deaf, dumb and blind...actually, based on what I have seen, not read in that fabrication called an anual report, patronage at their establishments has dropped off substantially.

The Krugman article is downright infuriating. Honestly, if government CPI-U doesn't go up, the man simply will not believe that inflation is increasing. End of sentence, paragraph, book, volume, epoch. It's really of no surprise that his mentor Paul Samelson believed for decades that the Soviet Union put out honest numbers and that their "economy" was booming. He believed that until 1989. I'm afraid Krugman (who is not an idiot) believes that there is low inflation now.

But even in this article, Krugman is trying to have a three-way with himself. On the one hand, commodity prices are going up because of increased industrial demand elsewhere in the world (true, but where? and looking at electricity demand for industrials across Europe and North America, those levels are hardly approaching 2006 levels, let alone 2008). Then the great mysterious "Demand for China" [Copyright]. And then the severe weather thing. This is all supposed to mean higher prices which of course mean we'll all just adjust and live with it, but it also means we're recovering.

So what is it exactly? Is it demand pull, supply push, signs of massive economic expansion? And why is oil at $90 on the spot but natural gas is still hugging $4? And why silver at 50% higher than the last time we hit $90 on oil? Forget applying this to rising health care prices. That's like a totally different discipline of price and behaviour with no universal applicable truths.

These are just the general limitations of the Keynesian model. Just amophorous blobs of stuff at varying prices with no connection to each other; chart gazing with a story. One thing is for certain: under no circumstance can the Fed ever be tied to any of this ever.

Krugman is posting article after article to support his argument that government is not growing, but he never, never, ever includes transfer payments as a percentage of GDP. And now he states that money printing on steroids has no effect on commodity prices? What a joke of a man.

I agree with you 100%. gas is not something you can just forget about it, its a necessity for many americans. I have to drive everyday to get to work, like many people in this country. For average american making 50-60k a year. oil at 60 versus at 90 is a big f8cking difference in the pocket book. if you live in NYC, this is irrelavent to you. But there are more people in this country than just those living in the big metro areas.

as for the inflation CPI thing, gas and food are not included. all those included are going down, such as housing price and wages. they made american peopel compete with chinese labor for wages.

Now is demand and supply. Our jobs got shifted to other countries. the brilliant professor came up with a formula: its natural, take it with big smile!

The GAO sites a study by Western Resource Advocates and reports that “ExxonMobil Corp. has acquired full or partial ownership in absolute water rights on 31 irrigation ditches from which the average amount of water diverted per year has exceeded 9,000 acre-feet.” Those water rights are also considered very senior water rights.

this just makes my blood curl. i just can't relate to you how offended i am that this is even being proposed. these gas companies are on the same level as the bansters and gov. RAPE RAPE and more raping. who is stupid enough to even think a barrel of oil is nearly worth 12 barrels of surface water. they are too damn cheap to drill wells. i have to leave this fucked up country.

it could take up to 12 barrels of water for every barrel of oil produced.

This has got to be one of the strangest openings in a while. NDX gets waxed while SPX recovers some losses. I don't know what to make of it but since the NDX has led the market on the way up it would be fitting for it to do the same for its date with gravity.

no the price of commidities have nothing to do with leverage/margin in the system, zero interest rates encourage people to borrow to place bets in risky assets. he of course fails to measure any kind of leverage in the system, the fed does the same, which is why we will have another crash.

You can not say the price of anything is based on fundamentals if there is margin in the system.

Hi, I'm krugman and the commodities story is all fundmentals, DUh so how come they tanked when qe 1 ended, took off when qe 1 started, and took off again when qe two was announced. Joke!!!!!! it has nothing to do with cheap money the fed is tossnig into he system handing the big POMO banks trillions and callowing them to use leverage has nothing to do with asset prices.

the guy is a jerk and an ass, and he is doing much more harm than good. he is the "liberal" Glenn Beck!!!